A G E N D A. CareerSource Broward (CSBD) Central Illumination Room, 2550 W. Oakland Park Blvd, 2 nd Floor Oakland Park, Florida 33311

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1 Broward Workforce Development Board Audit Committee Monday September 17, :00 a.m. 10:00 a.m. A G E N D A Call In Number: (888) Passcode: # CareerSource Broward (CSBD) Central Illumination Room, 2550 W. Oakland Park Blvd, 2 nd Floor Oakland Park, Florida The Committee is reminded of conflict of interest provisions. In declaring a conflict, please refrain from voting or discussion and declare the following information: 1) Your name and position on the Board, 2) the nature of the conflict and 3) who will gain or lose as a result of the conflict. Please also fill out form 8B prior to the meeting. SELF-INTRODUCTIONS APPROVAL OF MINUTES Approval of the Minutes of the June 6, 2018 Audit Committee meeting. RECOMM ACTION EXHIBIT Approval Motion for Approval Minutes of the June 6, 2018 meeting Pages 4 5 NEW BUSINESS 1. Selection of CSBD Audit Firm Consideration to recommend Anthony Brunson PA as the CSBD auditor. After soliciting quotes from six firms which included the firms performing the annual audits for CareerSource Palm Beach, CareerSource South Florida and CareerSource Gulf Coast it is recommended that the Audit Committee approve the firm of Anthony Brunson, PA at a cost of $29,000. Anthony Brunson was also the number two (2) rated firm when we last issued a request for proposals in September RECOMM ACTION EXHIBIT Approval Motion for Approval Memo #07 18 (LS) Pages 6 7 Audit Committee Meeting September 17,

2 2. Micro Purchase Threshold Consideration to 1) increase its micro purchase and quote thresholds to be aligned with the federal procurement thresholds and 2) to be able to automatically increase the procurement thresholds at any time there is a change to the federal guidance applicable to the procurement caps. CareerSource Broward (CSBD) follows federal guidelines in setting its purchasing thresholds. Recently the Office of Management and Budget amended the rules applicable to procurements for federal grantees by increasing the thresholds for micro purchases from $3000 to $10,000 and for quotes from $150,000 to $250,000. RECOMM ACTION EXHIBIT Approval Motion for Approval Memo #04 18 (LS) Page 8 REPORTS 1. General Fund Balance Since July 1, 2018, we have realized additional gross revenues of $24,043. The General Fund total at July 31, 2018, including revenues of $24,043, was $1,428,644. Expenditures charged to the General Fund during the period were $252,027 bringing the General Fund balance to $1,176,617. ACTION EXHIBIT None Memo #01 18 (FS) Page 9 2. Cherry Bekaert LLP Fiscal Monitoring Report Cherry Bekaert LLP conducted fiscal monitoring in July 2018 for the period 1/1/18 through 3/31/18. There were 0 findings and 2 observations. All findings and observations were corrected. ACTION EXHIBIT None Memo #01 18 (QA) Chart of Findings Pages Audit Committee Meeting September 17,

3 3. Administrative Building Update On 10/26/17 Anatom Construction was approved, by the Board, to serve as the General Contractor for the renovation of the new administrative building in the amount of $1,399,294. The project is 60% complete with an anticipated completion date in November ahead of schedule. Due to some omissions on the part of the architect and items not in our control we have had to approve change orders resulting in an increase to the original cost of the project. However, we also realized savings through value engineering. We were advised by Broward County Housing Authority, that it is standard in the industry to include a 10% contingency factor. At this time we are at 5.64% in overruns which is well below that number or a net difference of $78,865 for the overall increase. ACTION EXHIBIT None Memo #05 18 (LS) Pages Budget vs Expenditures Report We generally include a report on budget vs actual expenditures for Audit Committee review. However we provided a true up of the PY budget in May 2018, and an end of year report to the Audit Committee at its June meeting. The first quarter of PY has not yet closed. A report on budget vs actual will be provided at the next meeting. ACTION EXHIBIT None None MATTERS FROM THE AUDIT COMMITTEE MATTERS FROM THE FLOOR MATTERS FROM THE PRESIDENT/CEO ADJOURNMENT NEXT AUDIT COMMITTEE MEETING IS TO BE DETERMINED. Audit Committee Meeting September 17,

4 Broward Workforce Development Board Audit Committee Wednesday, June 6, :30am 12:00pm M I N U T E S CareerSource Broward Illumination Conference Room 2550 West Oakland Park Boulevard, Oakland Park, FL The Committee is reminded of conflict of interest provisions. In declaring a conflict please refrain from voting or discussion and declare the following information: 1) Your name and position on the Board, 2) the nature of the conflict and 3) who will gain or lose as a result of the conflict. Please also fill out form 8B prior to the meeting. SELF-INTRODUCTIONS ATTENDEE: STAFF: Michael Carn, Gary Arenson (by phone), Ben Chen, Mason Jackson, Rochelle Daniels, Yvonne Kobrin and Kathy Redford were present. APPROVAL OF MINUTES Approval of the Minutes of the March 12, 2018 Audit Committee meeting. On a motion by Ben Chen and seconded by Gary Arenson, the Audit Committee unanimously approved the minutes of the March 12, 2018 Audit Committee meeting. NEW BUSINESS 1. Approval to Solicit Quotes for Audit Services for the Audit This is to recommend that CareerSource Broward (CSBD) solicit quotes for the conduct of the organization-wide audits. Rochelle Daniels, CSBD General Counsel, reported that in the last two years we have experienced communication issues with our current audit firm. As a result staff is recommending that we solicit quotes from other firms. On a motion by Ben Chen and seconded by Gary Arenson, the Audit Committee unanimously approved the motion to approve the item. 4

5 REPORTS 1. General Fund Balance The General Fund Balance is $1,350,500 with gross revenues of $289,460 and expenditures of $585,540 most of which are for costs related to renovations of the new building. 2. Budget vs. Expenditures Report The Budget vs. Expenditure Report covers the period July 1, 2017 through April 30, 2018 or 83% of the year for funds awarded on a program year basis, July 1 June 30, and 58% of the year for funds awarded on a federal fiscal year basis, October 1 September Cherry Bekaert LLP Fiscal Monitoring Report October 2017 December 2017 Cherry Bekaert LLP conducted the fiscal monitoring for the period October 1, 2017 through December 31, There was one finding and 23 observations which have been corrected. 4. Taylor Hall Miller Parker, PA (THMP) Program Monitoring Report August 2017 February 2018 The THMP program monitoring report for the period August 1, 2017 through February 90, 2018 identified 9 findings and 23 observations. All findings and observations were corrected except where cases were closed and no further action could be taken. 5. Taylor Hall Miller Parker, PA Program Monitoring Report February 2018 April 2018 The THMP program monitoring report for the period February 9, 2018 through April 12, 2018 identified 4 findings and 28 observations. All findings and observations were corrected except where cases were closed and no further action could be taken. MATTERS FROM THE AUDIT COMMITTEE: None MATTERS FROM THE FLOOR: None MATTERS FROM THE PRESIDENT/CEO: Mason Jackson, President/CEO CSBD, discussed the information coming from the Tampa and Pinellas County Commissions where the local Boards are under investigation. Mr. Jackson reassured the committee regarding the various checks and balances in placve at CSBD and stated not every Board reports on performance and expenditures in the same way we do. Adjournment: 11:15 AM. 5

6 Memorandum # (LS) Administrative Office 2610 West Oakland Park Boulevard Oakland Park, Florida To: From: Mason Jackson, President/CEO Rochelle Daniels Date: September 13, 2018 Subject: Selection of CSBD Audit Firm SUMMARY After soliciting quotes from six firms which included the firms performing the annual audits for CareerSource Palm Beach, CareerSource South Florida and CareerSource Gulf Coast it is recommended that the Audit Committee approve the firm of Anthony Brunson, PA at a cost of $29,000. Anthony Brunson was also the number two (2) rated firm when we last issued a request for proposals in September BACKGROUND As reported to the Audit Committee and governing boards earlier this year staff recommended that we seek a new audit firm. This is because of communications issues which arose during the course of the performance of the annual audit over the two years of their engagement. Because the threshold for requests for proposals and bids is now purchases in excess of $150,000, CareerSource Broward (CSBD) was only required to solicit quotes in accordance with its Procurement and Purchasing Policy. DISCUSSION The CSBD Procurement and Purchasing Policy requires CSBD to solicit 2 quotes for purchases under $150,000. CSBD sent the request for quotes to 6 firms: Legacy CPAs1 Purvis Gray Kaufman Rossin Meyer Hoffman Macann (MHM) PC KPMG Anthony Brunson2 1 Recommended by BWDB member Dave Svetlick 2 Subcontracted by Watson Rice to perform the CareerSource South Florida audit. Currently listed as the CareerSource South Florida Auditor 6

7 Three of the firms indicated no interest because the engagement was too small. One, the CareerSource Palm Beach audit firm, MHM, stated that they preferred to audit not for profit entities as opposed to governmental entities. They stated Palm Beach was really bi-furcated into two (2) entities with the majority of the funds housed in the not for profit entity. The CareerSource South Florida audit firm of Watson Rice referred us to Anthony Brunson, PA as they sub contracted with Anthony Brunson PA to perform the audit. Anthony Brunson now does the CareerSource South Florida audit. In September 2016, the last time CSBD issued a request for proposals for audit services we received a number of bids and Anthony Brunson PA ranked number two (2) behind Grau and Associates. We did forward a copy of the audit quote specifications to Mr. Brunson and he completed the specification questions and responded with a quote at $29, The amount quoted is less than we paid for the Program/Fiscal year 16/17 audit which was $33,000. Mr. Brunson is familiar with CSBD having served as our auditor in the past.3 He is very well regarded by the community and his work is well known by several of our audit committee and board members. CSBD has fulfilled its purchasing requirements as a no quote/bid is considered a quote for the purpose of soliciting responses from at least 2 vendors, and CSBD solicited quotes from six (6) audit firms. RECOMMENDATION That Anthony Brunson and Associates be forwarded to the CSBD governing boards for approval to perform the CSBD audit and that his contract be subject to renewal for the four year period allowed by the state based upon the satisfactory performance of the engagement. Add money here. 3 Some board members may recall that Sharpton Brunson were our auditors in 2006 at the time that some fiscal anomalies was discovered. However the Sharpton Brunson Audit Report was accepted by the State and the US DOL as they were not forensic auditors and had followed the single audit guidelines as required in the performance of the audit at that time. Mr. Brunson was a partner in the firm of Sharpton Brunson at that time. 7

8 Memorandum # (LS) Administrative Office 2610 West Oakland Park Boulevard Oakland Park, Florida To: From: The Audit Committee Mason Jackson, President/CEO Date: July 30, 2018 Subject: Increase to the CSBD Purchasing Thresholds SUMMARY CareerSource Broward (CSBD) follows the federal procurement guidelines in setting its purchasing thresholds. Recently the threshold for micro purchases was increased from $3000 to $10,000 and the threshold for quotes from $150,000 to $250,000. CSBD is seeking approval to 1) increase its micro purchase threshold from $3,000 to $10,000 and its quote threshold from $150,000 to $250,000, to be aligned with the federal thresholds and 2) to be able to automatically increase the purchasing thresholds at any time there is a change to the federal guidance applicable to the procurement caps. BACKGROUND At its March 9, 2015, meeting the CSBD Audit Committee recommended adoption of the federal purchasing thresholds as a part of the CSBD procurement policies. This was approved by the CSBD governing boards at their March 2015 regularly scheduled meeting. At that time the thresholds were as follows: Micro Purchase (small business purchase) $3,000 Quotes $3, ,000 Competitively Advertised Procurement $150,000 and up DISCUSSION Recently the threshold for micro purchases was increased to $10,000 and for quotes the threshold was increased to $250,000. CSBD is seeking approval to align its purchasing thresholds with that established by the federal government in the, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards 2 CFR 200 et seq. (Uniform Guidance) which are the rules applicable to grant expenditures. As the Office of Management and Budget reviews the thresholds from time to time based upon economic indicators, inflation and other factors, approval to match CSBD s purchasing thresholds with that established by the federal government is requested. This is in accordance with guidance from the Florida Department of Economic Opportunity which is recommending that purchasing thresholds and procurement polices be aligned with the requirements of the Uniform Guidance. RECOMMENDATION Approval to recommend to the CSBD government boards that 1) the micro purchase threshold be increased from $3,000 to $10,000 and the threshold for quotes from $150,000 to $250,000 and 2) that CSBD amend its purchasing thresholds from time to time when there is a change to the federal guidance applicable to procurement caps. 8

9 Administrative Office 2610 W. Oakland Park Blvd. Oakland Park, Florida Memorandum #1 18 (FS) To: From: Subject: Audit Committee Mason Jackson, President/CEO General Fund Balance Date: September 6, 2018 SUMMARY Since July 1, 2018, we have realized additional gross revenues of $24,043. The General Fund total at July 31, 2018, including revenues of $24,043, was $1,428,644. Expenditures charged to the General Fund during the period were $252,027 bringing the General Fund balance to $1,176,617. BACKGROUND We realize revenue from the initiatives listed in the chart below. When unrestricted revenue is earned we first deposit it into Citi Bank. We make transfers into the State Board of Administration (SBA) twice a year paying our General Fund bills from the Citi Bank account because of the complicated SBA withdrawal process. DISCUSSION At the end of June 2018 there was $1,404,601 in the General Fund. General Fund revenues and expenditures for the period 7/1/18 7/31/18 Revenues Interest SBA/ Citibank Money Market 2,638 Tobacco Free Florida Vocational Rehabilitation 500 Ticket To Work (TTW) 20,905 Expenditure 8,903 Food purchases per Board approval 719 New Building Costs - Architect & Renovation Costs 242,405 Total 24, ,027 The General Fund total at July 31, 2018, including revenues of $24,043, was $1,428,644. We had expenditures of $252,027, mostly attributable to the new building renovation. The General Fund balance is $1,176,617 as of July 31, RECOMMENDATION None. For information purposes. 9

10 Administrative Office 2610 West Oakland Park Boulevard Oakland Park, Florida Memorandum #01 18 (QA) To: From: Audit Committee Mason Jackson, President/CEO Subject: Results of the Cherry Bekaert, LLP Fiscal Monitoring Report #2 FY issued August 2018 Date: August 14, 2018 SUMMARY Cherry Bekaert conducted fiscal monitoring for the period 1/1/18 through 3/31/18. There were no (0) findings and 2 observations. All observations have been corrected. BACKGROUND Cherry Bekaert monitors fiscal activities three times a year. This was the second monitoring for the program year. DISCUSSION Cherry Bekaert reviewed a total of 1,167 elements during the review period. Based upon the total elements reviewed, the report cites to no (0) findings equating to an error rate of 0%. During this monitoring period there was a total of 2 observations. CSBD Financial Review Bank Reconciliation - General Fund Account Observation We noted one of the bank reconciliations had been performed over 30 days after the bank statement period ending date. Additionally, all five bank reconciliations were not reviewed in a timely manner. Recommendation We recommend CSBD ensure all bank reconciliations are performed timely. Agree / Disagree Resolution Agree Since April 2018, bank statements are completed by the 10th day of the month. 10

11 CSBD Financial Review Disbursements Non-Payroll Observation A physical receipt for a purchase was not in the file. Recommendation CSBD should ensure all purchases include a receipt. Agree / Disagree Agree Resolution The receipt was located after the fact. In the future, purchases will be made either through credit card or through a check requisition in accordance with our procurement policies. RECOMMENDATION None. Presented for informational purposes. 11

12 10 CareerSource Broward Cherry Bekaert Fiscal Findings - FY Previous Year-End Adjusting Journal Entries ETA Salary Bank Reconciliation Cash Draw Poperty and Bonus Management CAP Insurance Cash Receipts Procurements Cost Allocation SERA Financial Reporting OSMIS Financial Reporting Payroll Customer Related Expenditures Mileage Reimbursements Non-Payroll Expenditures P-Card Expenditures Cell Phone Expenditures Report # Report # EmpHire Payroll EmpHire Mileage This chart provides a breakdown of program year-to-date findings by category type. 12

13 Administrative Office 2610 West Oakland Park Blvd. Oakland Park, Florida Memorandum #05 18 (LS) TO: FROM: SUBJECT: Executive Committee Mason Jackson, President/CEO 2890 Administrative Office Update DATE: September 12, 2018 Summary On October 26, 2017 Anatom Construction was approved, by the Board, to serve as the General Contractor at a cost of $1,399,294, for the renovation of the new administrative building. Renovation work started on February 5 th, As of August 8th, 2018, the project is 60% complete with an anticipated completion date in November, ahead of schedule. Due to some omissions on the part of the architect and items not in our control we have had to approve change orders resulting in an increase to the original cost of the project however we also realized savings through value engineering. The net difference is $78, or a 5.64% increase overall. Background In October, 2016 CareerSource Broward (CSBD) purchased a building for its administrative offices. The building was in need of renovation and following a public competitive procurement Anatom Construction, the low bidder, was selected and approved by the Board on October 26, 2017 to perform the renovations at a cost of $1,399,294. To accomplish the renovations Mason Jackson, the CSBD President/CEO contacted Ann Deibert, of the Broward County Housing Authority (BCHA) to enlist their assistance in managing the Anatom contract. BCHA entered into an Agreement with us to provide their expertise to address issues that might arise during a project such as the one we were undertaking. DISCUSSION In completing the renovations there are 3 main categories of change orders. A change order generally also means a change in price. The categories are as follows: 1. Items needing correction which are not evident until demolition is initiated 2. Items which the architect did not specify or specified incorrectly which became evident once the renovation started. 3. Items which were noted by CSBD as we inspected the progress of the renovation on a day to day basis and which economically made sense to include with the renovations as opposed to after the fact. 13

14 We were advised by BCHA, prior to letting the bid, that CSBD could request value engineering. This means we would have the opportunity to meet with the General Contractor and discuss how to bring down the price from the original bid price. This too would be considered a change order. CSBD worked with BCHA to pursue value engineering options wherever possible to reduce the overall cost of the project. BCHA has advised us that it is standard in the industry to include a 10% contingency factor. At this time we are at 5.64% in overruns which is well below that number. This was not originally budgeted, which is why we are providing an update to the governing boards on these expenditures. We have summarized the change order requests below. The chart that follows depicts all change order costs to date: 1 Anatom Construction Changes orders necessary to address existing conditions not evident at the time of the submission of the bid but discovered during process of renovation. Examples included the need to correct cracks in the foundation, corroded drywall framing, and other minor defects which were only evident once the drywall was removed. 2 Architect Errors and Omissions These Change orders resulted from omitting or incorrectly specifying many of the finishes, not providing for plumbing although sinks were specified, or specifying the wrong materials. These represented 81% of all change orders. 3 CSBD Change orders requested by CSBD which largely involved dividing some open space to include 2 additional offices not anticipated at the time the original plans were drawn and other minor additions. + $11, $73, $40, Subtotal of change orders outside original scope of work + $125, CSBD CSBD reductions to the above consisted of value engineering efforts in collaboration with BCHA. Examples include less expensive materials such as ceiling tiles from those specified by the architect, eliminating the board room partitions and other smaller changes. - $47, Total net change in costs to date of all change orders + $78, The BCHA advised us with respect to allowing change orders indicating to us what was necessary. As the items that comprised the changes were necessary, had they been included in the plans, they would have resulted in a higher bid than we received. So as not to hold up the renovations we have been approving the change requests as they arose. The costs incurred to date have been approved as a part of our general day to day operating costs which are within the purview of CSBD authority to expend. While we did not budget for a contingency amount we will come back to the governing boards if expenditures appear to be in excess of the standard 10% as advised by BCHA before spending over that amount. To date, additional expenditures to the originally budgeted amount are 5.64%. CSBD on the recommendation of BCHA will be seeking quotes for refinishing the parking lot. We will look at both black top and cement and we will bring that back for approval as the renovations progress. We anticipate that we will contract for that directly saving the General Contractor s fee. RECOMMENDATION None, for information only. 14